Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Thursday, 20 August 2015
Page: 5861

Senator LINDGREN (Queensland) (10:47): When the government announced it will restrict the type of consumer leases customers can pay for using Centrelink it was to ensure that low-income consumers are protected. The number of low-cost finance options supported through the service will also increase. The Minister for Human Services, Senator the Hon. Marise Payne, said:

The new criteria for consumer leases will mean those leases that run for an indefinite period, or have a duration of four months or less, will be excluded from Centrepay and only those which are regulated under the National Consumer Credit Protection Act 2009 will be allowed.

Minister Payne said:

These leases provide better protection for vulnerable customers as businesses must comply with the responsible lending obligations overseen by the Australian Securities and Investments Commission …

She went on to say:

A Department of Human Services working group with Treasury and key stakeholders will review Centrepay policy to promote the disclosure of effective interest rates by Centrepay registered providers.

Vulnerable families often find themselves in positions where the necessary items they require to manage their households are simply out of reach. To have schoolkids' clothes washed and ready for school on a weekday is perhaps sometimes not in the realm of those who are struggling to make ends meet and who cannot afford to go out and purchase whitegoods for their homes, particularly washing machines and refrigerators. What do you do if your refrigerator does not work or your washing machine is not working? You use a consumer lease and you use Centrepay to pay back that lease. Currently in Queensland, Centrepay—the voluntary bill-paying service—includes businesses that align themselves as companies that will allow social inclusions such as paying for sporting fees.

Excluding all consumer leases from Centrepay would interfere unduly with existing means of urgent access to necessary goods. The recent changes to Centrepay announced by the minister strike a balance between strengthening protections for consumers and not interfering unduly with existing means of facilitating access to necessary goods. We have just heard Senator Cameron say that Centrepay has been an outstanding success. This government seeks to enhance that, not detract from it. It is a simple budget tool that is free, and Centrepay deductions are easy to do. Deductions cannot start without permission—this is a very good point that they make. The government strongly encourages people to carefully read the fine print and research all available options before signing on the dotted line. This means that these families, with the knowledge that they have increased protection aids, can utilise Centrepay to provide their family environment with the goods they need to make sure their family functions well. Is it not our commitment to the people of Australia to provide them with the opportunity and balance to enable them to have a normal family?

Regulated consumer leases are not being excluded from Centrepay. Welfare recipients are usually unable to access many forms of credit, including credit cards, bank loans and other types of loans that exist out there. Regulating consumer leasing is one of the few ways of obtaining essential household goods quickly. There are alternatives to consumer leases, such as the no-interest loan scheme operated by Good Shepherd Microfinance and other low-interest loans. Centrepay is being expanded to support those options and other microfinance approaches, but until these alternatives are available on a much broader and much larger scale many customers will depend on consumer leases, and the use of Centrepay for regulated consumer leases should remain open.

The department has strengthened its relationship with ASIC, the Australian Competition and Consumer Commission and the Australian Energy Regulator. Agreements with these regulators allow for the exchange of information in relation to entities of mutual interest, including businesses seeking approval to use, or approved to use, Centrepay. These relationships have led to the exposing of businesses that may not have appropriate licensing, are operating illegally, are not complying with consumer law or are operating unscrupulously towards customers. This step clearly shows that the government has at heart the protection of consumers foremost.

The bill that we are debating today suggests that all operators are shonks—and yes, there are some that are. The government and the minister are aware of this and that is why these relationships with vital regulatory bodies have been enhanced. The goal is simple: allow access to necessities to those who currently struggle and protect them along the way. I agree with previous speakers that we should not take Centrepay away. Social inclusion and pride can be as simple as the kids leaving the house each day with clean, ironed school clothes on their backs and a lunch box full of unspoiled food. Yes, there are shonky dealers, but the majority of credit providers uphold good credit ethics. This bill suggests that credit providers work under the guise of, 'The providers will rip you off and you are not smart enough to know it.'

This is continually the line that those opposite take. They make people feel vulnerable and weak and they profess that they are the only political party that can help. Continually pushing people towards welfare is demeaning to those who have a greater outlook on life. That is why this government will educate those on Centrelink who choose to utilise the Centrepay options. The Department of Human Services has also added a link to the Australian Securities Investments Commission Money Manager website to help raise awareness of good financial management. We as a government believe that people can be responsible in the way they manage their finance. We will continue to educate them, allowing a more adept choice of consumer spend from their resources. Not all families that receive Commonwealth support choose to—nor are they misguided in their choice of how to—utilise this support to best protect themselves.

I am advised that, if Senator Cameron's bill were enacted, it would mean that people on income management would not be able to pay for any consumer lease obligations, regulated or unregulated, using their income managed money, regardless of whether they have existing obligations. The purpose of income management is to ensure that the priority needs of welfare recipients are met and that they are protected from the things that would undermine them, their families and their communities. These are things like alcohol and gambling. Income management was not designed to stop people being able to rent a refrigerator to store their food or a washing machine to clean their clothes if renting is the only way they can acquire them or if renting is the way they choose to acquire such things.

The bill as introduced would not actually have the impact on Centrepay that its proponent purports to want. Instead, it would restrict people who are supported by income management, by adding rent-to-buy contracts to the categories of goods and services excluded for income management purposes; not restrict the use of consumer leases under Centrepay. The change to income management arrangements is not supported. Customers may have existing consumer lease obligations when they enter income management and they may need to continue to meet those obligations. The key point is that people on income management are aware of the alternatives. Departmental officers are providing and will continue to provide such advice to them. The government will continue to support and educate people who enter such agreements and, most importantly, the government will continue to work with stakeholders to weed out dishonest sharks that prey on the weak.